Answer of Defendant UAL Corp
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Case3:10-cv-02858-RS Document29 Filed08/05/10 Page1 of 33 1 Max R. Shulman (NY State Bar No. 1473982) Stuart W. Gold (NY State Bar No. 1639434) 2 Katherine B. Forrest (NY State Bar No. 2381457) CRAVATH, SWAINE & MOORE LLP 3 Worldwide Plaza 825 Eighth Avenue 4 New York, NY 10019 Telephone: (212) 474-1000 5 Facsimile: (212) 474-3700 Email: [email protected] 6 [email protected] [email protected] 7 Pro Hac Vice Admission Pending 8 Patrick D. Robbins (CA State Bar No. 152288) 9 Mikael A. Abye (CA State Bar No. 233458) SHEARMAN & STERLING LLP 10 525 Market Street, Suite 1500 San Francisco, CA 94105-2723 11 Telephone: (415) 616-1100 Facsimile: (415) 616-1199 12 Email: [email protected] [email protected] 13 Attorneys for Defendants UAL Corporation and 14 United Air Lines, Inc. 15 UNITED STATES DISTRICT COURT 16 NORTHERN DISTRICT OF CALIFORNIA 17 SAN FRANCISCO DIVISION 18 Michael C. Malaney, et al., CASE NO. 3:10-CV-02858-RS 19 Plaintiffs, ANSWER OF DEFENDANTS UAL 20 vs. CORPORATION AND UNITED AIR LINES, INC. TO PLAINTIFFS’ 21 UAL CORPORATION, UNITED AIR COMPLAINT FOR INJUNCTIVE RELIEF LINES, INC., and CONTINENTAL AGAINST VIOLATIONS OF SECTION 7 22 AIRLINES, INC., OF THE CLAYTON ANTITRUST ACT 23 Defendants. 24 25 26 27 28 ANSWER OF DEFENDANTS UAL CASE NO. 3:10-CV-02858 RS CORPORATION AND UNITED AIR LINES, INC. 289670 Case3:10-cv-02858-RS Document29 Filed08/05/10 Page2 of 33 1 Defendants UAL Corporation and United Air Lines, Inc. (collectively, “United”), as for 2 their Answer to plaintiffs’ Complaint, state as follows: 3 I. INTRODUCTION 4 PARAGRAPH 1: On May 3, 2010, the defendants announced that they had agreed to 5 combine in an all stock transaction, valued at more than $8 billion, merging United and 6 Continental Airlines (“Continental”), eliminating the substantial competition between them, and 7 merging to create the world’s largest airline. It is proposed that the unlawful combine would 8 operate under the United name. 9 10 UNITED’S RESPONSE: 11 United denies Paragraph 1, except admits that on May 3, 2010, United and Continental 12 Airlines (“Continental”) announced a definitive agreement to merge through an all-stock 13 transaction and that the merged entity would operate under the United name. 14 PARAGRAPH 2: The effect of the announced merger between United and Continental 15 may be substantially to lessen competition, or to tend to create a monopoly, in the transportation 16 17 of airline passengers in the United States and certain submarkets and in violation of Section 7 of 18 the Clayton Antitrust Act, 15 U.S.C. § 18. 19 UNITED’S RESPONSE: 20 Paragraph 2 states a legal conclusion to which no response is required. To the extent a 21 response is required, United denies Paragraph 2. 22 PARAGRAPH 3: The probable and planned anticompetitive effects of this unlawful 23 combination are increases in prices and fares, elimination and/or curtailment of services, 24 25 elimination or curtailment of frequency of flights, curtailment of capacity of aircraft and available 26 seats for passage, elimination of tens of thousands of jobs, the deterioration of quality of service, 27 the addition of charges for amenities otherwise considered part and parcel of the service, the 28 elimination or substantial cutback of traffic to hubs, the creation of monopolies for passenger air ANSWER OF DEFENDANTS UAL CASE NO. 3:10-CV-02858 RS CORPORATION AND UNITED AIR LINES, INC. 1 289670 Case3:10-cv-02858-RS Document29 Filed08/05/10 Page3 of 33 1 traffic from and to major cities, and the encouragement and trend to further concentrate the 2 industry toward ultimate monopoly. 3 UNITED’S RESPONSE: 4 United denies Paragraph 3. 5 PARAGRAPH 4: Plaintiffs are individuals who have purchased airline tickets from one or 6 both of the defendants in the past, and expect to continue to do so in the future. They are 7 threatened with loss or damage by the defendants’ merger in violation of Section 7 in the form of 8 9 higher ticket prices and diminished service, and, accordingly, they bring this action for preliminary 10 and permanent injunctive relief against the merger pursuant to Section 16 of the Clayton Antitrust 11 Act, 15 U.S.C. § 26. 12 UNITED’S RESPONSE: 13 United lacks knowledge or information sufficient to form a belief as to the accuracy of the 14 first sentence of Paragraph 4. United denies the remainder of Paragraph 4, except admits that 15 16 plaintiffs purport to bring an action pursuant to 15 U.S.C. § 26. 17 II. JURISDICTION 18 PARAGRAPH 5: This action is brought under Section 16 of the Clayton Antitrust Act, 15 19 U.S.C. § 26, to prohibit the consummation and the effectuation of defendants’ planned unlawful 20 merger in violation of Section 7 of the Clayton Antitrust Act, 15 U.S.C. § 18. This Court has 21 subject matter jurisdiction of the federal antitrust claims asserted in this action under Section 16 of 22 the Clayton Antitrust Act, 15 U.S.C. § 26, and Title 28 United States Code Sections 1331 and 23 1337. 24 25 UNITED’S RESPONSE: 26 United admits that Plaintiffs purport to bring this action under Sections 7 and 16 of the 27 Clayton Antitrust Act, 15 U.S.C. §§ 18 and 26, and that this Court has subject matter jurisdiction 28 of any properly pled federal antitrust claims pursuant to 15 U.S.C. § 26 and 28 U.S.C. §§ 1331 and ANSWER OF DEFENDANTS UAL CASE NO. 3:10-CV-02858 RS CORPORATION AND UNITED AIR LINES, INC. 2 289670 Case3:10-cv-02858-RS Document29 Filed08/05/10 Page4 of 33 1 1337. The remainder of Paragraph 5 states legal conclusions to which no response is required. To 2 the extent a response is required, United denies the remainder of Paragraph 5. 3 III. THE PARTIES 4 PARAGRAPH 6: Each of the plaintiffs named herein below is an individual and a citizen 5 of the state listed as the address for each such plaintiff, and in the four years next prior to the filing 6 of this action, each plaintiff has purchased airline tickets from one or both of the defendants, and 7 each plaintiff expects to continue to purchase airline tickets from one or both of the defendants or 8 their merged entity in the future: 9 10 Michael C. Malaney, 5395 Egypt Creek NE., Ada, MI 49301; 11 Katherine R. Arcell, 4427 S. Miro St., New Orleans, LA 70125; 12 Keith Dean Bradt, 690 W 2nd St., Suite 200, Reno, NV 89503; 13 Jose M. Brito, 2715 Sage Bluff Ct., Reno, NV 89523; 14 Jan Marie Brown, 975 Kennedy Dr., Carson City, NV, 89706; 15 Robert D. Conway, 6160 W. Brooks Ave., Las Vegas, NV 89108; 16 17 Rosemary D’Augusta, 347 Madrone St., Millbrae, CA 94030; 18 Brenda K. Davis, 11022 Old Military Trail, Forney, TX 75126; 19 Pamela Faust, 6227 Whileaway Dr., Loveland, OH 45140; 20 Carolyn Fjord, 4405 Putah Creek Road, Winters, CA 95694; 21 Don Freeland, 73801 White Sands Dr., Thousand Palms, CA 92276; 22 Ted Friedli, 8 Chelton Way, Long Branch, NJ 07740; 23 Donald V. Fry, 6750 Northrim Ln., Colorado Springs, CO 80919; 24 25 Gabriel Garavanian, 104 Sequoia Road, Tyngsboro, MA 01879; 26 Harry Garavanian, 104 Sequoia Road, Tyngsboro, MA 01879; 27 Yvonne Jocelyn Gardner, 10-Gold Coin Ct., Colorado Springs, CO 80919; 28 Lee M. Gentry, 7021 Forestview Dr., West Chester, OH 45069-3616; ANSWER OF DEFENDANTS UAL CASE NO. 3:10-CV-02858 RS CORPORATION AND UNITED AIR LINES, INC. 3 289670 Case3:10-cv-02858-RS Document29 Filed08/05/10 Page5 of 33 1 Jay Glikman, 4265 Marina City Dr. #809, Marina del Rey, CA 90292; 2 Donna M. Johnson, 1864 Masters Dr., DeSoto, TX 75115; 3 Valarie Ann Jolly, 2121 Dogwood Loop, Mabank, TX 75156; 4 Gail S. Kosach, 4085 Ramrod Cir., Reno, NV 89519; 5 Rozann Kunstle, 7210 Fleetwood Ct., Colorado Springs, CO 80919; 6 Steve Kunstle, 7210 Fleetwood Ct., Colorado Springs, CO 80919; 7 John Lovell, 1834 Whirlaway Ct., Kentwood, MI 49546; 8 9 Len Marazzo, 1260 Springer Ct., Reno, NV 89511; 10 Lee McCarthy, 35 Lancashire Place, Naples, FL 34104; 11 Lisa McCarthy, 35 Lancashire Place, Naples, FL 34104; 12 Patricia Ann Meeuwsen, 1062 Wedgewood, Plainwell, MI 49080; 13 L. West Oehmig, Jr., 1017 East Brow Road, Lookout Mountain, TN 37350 14 Cynthia Prosterman, 527 20th Ave., San Francisco, CA 94121; 15 16 Deborah M. Pulfer, 16264 E. Mason Rd., Sidney, OH 45365; 17 Sharon Holmes Reed, 622 Grandview Ave., Kingman, AZ 86401; 18 Dana L. Robinson, 127B Palm Bay Terrace, Palm Beach Gardens, FL 33418; 19 Robert A. Rosenthal, 4659 Bridle Pass Drive, Colorado Springs, CO 80923; 20 Bill Rubinsohn, 261 Old York Road, Jenkintown, PA 19046; 21 Sondra K. Russell, 1206 N. Loop 340, Waco, TX 76705; 22 Sylvia N. Sparks, 3320 Conte Drive, Carson City, NV 89701; 23 24 June Stansbury, 363 Smithridge Park, Reno, NV 89502; 25 Clyde D. Stensrud, 1529 10th St W., Kirkland, WA 98033; 26 Sherry Lynne Stewart, 6565 Foxdale Cir., Colorado Springs, CO 80919; 27 Wayne Taleff, 768 Farmsworth Ct., Cincinnati, OH 45255; 28 Gary Talewsky, 14 Cow Hill Rd., Sharon, MA 02067; ANSWER OF DEFENDANTS UAL CASE NO. 3:10-CV-02858 RS CORPORATION AND UNITED AIR LINES, INC. 4 289670 Case3:10-cv-02858-RS Document29 Filed08/05/10 Page6 of 33 1 Annette M. Tippetts, 2783 East Canyon Crest Dr., Spanish Fork, Utah 84660; 2 Diana Lynn Ultican, 9039 NE Juanita Dr.